Over the years, we at American Business Appraisers have come to appreciate the many similarities between the practices of medicine and business appraisal:
- Both involve science – careful, systematic observation and gathering of facts,
- Application of proven theories,
- Both involve art – the use of informed, reasoned judgments based on experience and training,
- Both physicians and appraisers issue opinions – of one’s health or the value of one’s business.
Building on the medical analogy, when you wrench your knee, you go to the doctor expecting a quick examination and X-ray of your leg, and not more. You would probably be concerned if the physician ordered a full physical examination. On the other hand, when you get an annual checkup, you would be surprised if the physician only relied upon a limited examination. For your wrenched knee, a limited examination is all this is required to diagnose and treat you. For an annual physical, a complete examination is required.
Let’s substitute “appraisal” for “examination”, There are “limited” and “complete” scope appraisals. A “complete” appraisal results in an unambiguous opinion of value of a business interest (often required for taxation (IRS), litigation and regulatory compliance reporting purposes). A ”limited” appraisal is an abridged form of the “complete” appraisal. There are many varieties of a limited appraisal. Limitations may apply to the scope and depth of the analysis, the reliability of the assumptions used and the valuation methodologies employed.
Budget and time pressures should NEVER be a criterion for choosing between complete or limited appraisals. If you need a heart transplant, are you going to shop for the best price and quickest service?
How can American Business Appraisers Help?
Because of the aforementioned consideration, the best thing clients and their advisors can do when seeking valuation assistance is to explain their situation and needs, and let the appraiser suggest whether a “complete” or “limited” appraisal is appropriate. With our initial consultation, there is no cost or obligation to you. We promise you two things; first, to invest a reasonable amount of time to gain an understanding of your specific requirements, and second, our communication will be kept confidential.